EIU claims top spot for China forecasts

Wed, 06th May 2020

We are delighted to announce that our Access China team has won the Consensus Economics 2019 Forecast Accuracy Award for China.

The world’s leading macroeconomic survey firm, Consensus Economics base their awards on accuracy in predicting annual changes in real GDP and consumer price index (CPI), with the 2019 awards based on forecasts made from January 2018 to December 2019.

For China’s GDP, the Access China team were rewarded for adopting what, for much of that period, was a below-consensus forecast. Official data showed that GDP growth eventually came in at 6.1% in 2019 (as the team had predicted in January 2018).

Meanwhile, for inflation, the team backed a consistently above-consensus forecast based on our analyst Dan Wang’s expert understanding of the unique nature of the pork cycle in China and the huge impact of African swine fever (ASF). The wider market failed to realise that inflation would be a persistent rather than temporary phenomenon and other forecasters overestimated the government ability to address ASF, a deadly disease with no cure or vaccination, just like the coronavirus. The CPI rise in 2019 came in at 2.9% and we had forecast inflation of around 3% throughout 2018-19.

Moving into 2020, the EIU’s Access China team has continued to lead the way in forecasting China’s GDP growth. In the first quarter of this year, and in light of quarantine and lockdown imposed within China due to the coronavirus outbreak, China’s output contracted by 6.8% year on year (and 10.7% quarter on quarter). Given this uncertainty, forecasts from other organisations for China’s first-quarter economic slump ranged between -28.9% and +4% (on an annual basis). However, the Access China team again got things spot on: our prediction was that output would drop by 7% year on year (and 10.9% quarter on quarter).

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